Over the past several days, investors have seen much volatility in the markets, dropping dramatically one day and soaring back the next. This is not unexpected – market corrections are very common, especially given the six-year long bull market we have experienced. Equities dropped to correction territory (generally a loss greater than 10%) earlier in the week, but have staged a comeback in the last couple trading sessions – today the S&P 500 rose 2.43%, while the Dow jumped 2.27%. In the fixed income market, yields on 10-year treasuries were at 2.179%, their highest level since mid-August.
Investors should expect ongoing ups and downs as the market digests these recent trading swings, but where does all this leave our participants?
CBIS believes it is critical for any long-term investors to have a strategy and stick to target allocations even at times like this. Our goal is to help sustain your ministries and other needs over the long-term. In working with your organization, we developed target asset allocations with an understanding of your long- and short-term cash flow needs and your risk tolerance.
While CBIS and our sub-advisors had been anticipating some type of market correction and had been working to position our active Funds more defensively in seeking to manage through the expected volatility, it is possible your portfolio may become under-invested in equities if stock prices fall again with further market correction. It is therefore important to evaluate rebalancing in volatile markets in order to maintain your target allocations.
Your CBIS advisor is available to help – we can review your portfolio’s risk / return profile and current allocations to be sure they are still in line with your targets.